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WASHINGTON — Regulators are starting to scrutinize Warren Buffett’s Berkshire Hathaway to
determine whether it is important enough to the financial system to require Federal Reserve
supervision, according to two people with knowledge of the matter.

The U.S. Financial Stability Oversight Council staff’s study of Berkshire doesn’t mean the panel
is inclined to designate the Omaha, Neb.-based company, said the people, who requested anonymity.
Any decision could be months away, they said. The company’s reinsurance operation is the world’s
fourth-largest.

The council, led by Treasury Secretary Jacob Lew, is evaluating which nonbank financial
companies could threaten financial stability if they were to fail. The Fed can then impose stricter
capital, leverage and liquidity requirements and demand stress testing for crisis scenarios.

Berkshire is “in the business of accepting risk” through its reinsurance units, Cliff Gallant,
an analyst with Nomura Holdings, said Wednesday.

“You’re taking volatility away from other people and accepting it to your own balance sheet,”
Gallant said.

Buffett didn’t return a message left with an assistant. Treasury spokesman Matt Bevens declined
to comment. FSOC rules state that because of the “preliminary nature of the council’s evaluation,”
it doesn’t disclose the names of companies until they are formally designated systemically
important.

Since its first meeting in October 2010, the council has designated three systemically important
nonbank financial firms: New York-based American International Group; Newark, N.J.-based Prudential
Financial; and General Electric’s finance unit. New York-based MetLife, the largest U.S. life
insurer, is in the final stage of review.

The FSOC was created by the 2010 Dodd-Frank law to monitor potential risks to the financial
system and prevent another crisis. Its voting members include Lew, Fed Chairman Ben Bernanke, and
the chairmen of the Securities and Exchange Commission and Federal Deposit Insurance Corp.